Cohen Closing and Title
Questions to ask your title company about: WIRE FRAUD
Updated: Nov 17, 2022
You can never be too careful. That is the approach we're taking to protecting your clients' funds and preventing fraud from occurring on our transactions. And if being proactive when it comes to fraud prevention isn't top of mind for you yet, consider yourself lucky! But chances are it won't be long until one of your transactions is affected. As an agent, you need a team surrounding and supporting you with the best resources for your clients. Do you have those resources when it comes to security and funds protection? Find out by asking your title company these questions.
My buyer's bank isn't local. How will they send their cash to close?
In today's world of online banking, this question is becoming more and more common. If your buyer can't walk into their bank to request a certified bank check for their closing, they'll need another way to send certified funds - most likely a wire. Make sure you ask this question early enough for your buyer to set up their wire. Also be sure that you and your client understand the wire transfer process. Title companies should have a secure system set up for your buyer to download the wire process and instructions through encryption. Instructions should NEVER be accepted by unsecured email. And remember - your title company will never ask you to send money by wire unless you reach out with that need!
What security systems do you have in place for sending wire information to my buyers?
Sending wire instructions via unsecured email is a big NO. Even accepting instructions over the phone constitutes a risk these days. For this reason, many title companies use secure email for this communication. At Cohen, we've invested in a program called CertifID that allows your buyer to securely download our instructions using two factor authentication. This way, the risk of emailing about wires is eliminated. It's also crucial to remember that our instructions won't change! Once you have downloaded them, you won't need to update them.
If my buyer wires to you, are their funds insured?
Great question! We can only control what we send to your buyer and give them as much education as possible to ensure they know who they're sending their funds to. When your buyer downloads their instructions from CertifID, the program does give them the option to insure their transfer. The price to insure it varies slightly based on how much they're sending, but it's typically around $15 per transaction. It is totally optional! Check with your title company if this is one of your client's top concerns!
How can I educate my buyers to prevent them from falling victim to wire fraud?
Buyers are the standard target for fraudsters. Fraudsters know the buyer has to bring money to the closing. So they use that and their circumstances against them. By reading emails sent unsecurely, they can determine where and when the closing will be. They learn what the communication looks like on a transaction, and use that to fool the buyer into sending money urgently. As the title company, we have plenty of resources to provide you and your buyer with to help you identify the red flags so you can avoid them. We also have the support of a strong IT company and a robust wire communication system to prevent your buyer from being a victim.
What options do you have for disbursing my seller's proceeds?
The most ideal situation is for your seller to come to closing and take their proceeds in the form of a check to the bank! This is the most ideal because it's the most secure. We ID them, personally hand it to them, and only they can cash it at their bank. However, there are plenty of times when the seller cannot be at the closing to take their check. In these situations, we can offer delayed pick-up, certified mail or wiring options. We like to discuss the options with each seller to determine which path is best for them!
What security systems do you have in place for receiving wire information from my sellers?
Receiving wiring instructions is serious business. Your seller does NOT want their personal banking information exposed by unsecured email. For this reason, your title company should have an encrypted system to receive instructions from your seller. At Cohen, we use CertifID! The system will scan the device and IP address that the seller is using to upload their isntructions to confirm they are who they say they are. The seller must also answer knowledge based authentication questions about themselves for added security. Once uploaded and verified, we get access to them.
How do you protect my seller's payoff funds from fraud?
Lately, payoffs are one of the most at-risk items in the transaction. Payoffs are almost always wired out to the lender, giving wire fraudsters an unfortuante opportunity. They attempt to trick title companies into accepting a forged payoff with forged wiring instructions that look identical to a real payoff. At Cohen, we use CertifID's newest feature to verify all of our payoff instructions are legitimate before sending.
Are your wires insured?
Great question! While buyers have the ability to choose to insure the wire they're sending out, does the title company choose to insure the wires they send out? At Cohen, the answer is yes. Any wire that is verified through our CertifID software is insured up to $1 million.
How can I educate my sellers to help prevent them from falling victim to wire fraud?
As an agent, you are in the best position to educate your seller clients on wire fraud. Since the title company is the one handling the sellers' funds, make sure you're working with one who has all of the right resources and systems in place to properly protect your seller. In addition to that, ask your title company for information and best practices for your seller to use to ensure their communications are secured. We'll see you at the closing table!